Starting in April 2003, the government will no longer protect deposits when banks fail and instead introduce a "payoff" scheme offering partial protection of up to 10 million yen per depositor per bank.
As the deadline draws near, certain sectors of the banking industry and lawmakers within the ruling coalition are urging the state to delay the plan. In the background is the fact that when the government terminated its full guarantee on time deposits in April, the shift of funds from small and medium-size banks -- some of which was put into postal savings accounts -- was larger than anticipated.
Both individual depositors and corporate clients, as well as public sectors, such as the municipal governments, are reviewing their choice of financial institutions.